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Thursday, April 30, 2009

How to Avoid Identity Theft: Phishing Scams

I'm shredding more old bank statements and other boring things today, so I thought I'd continue with the identity theft theme.

The Federal Trade Commission estimates that roughly 9 million people are victims of some form of identity theft each year. Identity theft can simply involve one credit card number or your social security number and all account numbers. Either way, it's an expensive crime, both in monetary value and in frustration and emotional upheaval.

Phishing Scams

Phishing is a scam that is designed to get your personal information. Most people receive phishing spam in their e-mail box. These e-mails are designed to look like e-mails from legitimate companies, like Paypal or Amazon. There's often a hook that tells you something is wrong with your account or that you have a new message. You just need to follow the link to find out how to fix the problem. Fixing the problem often involves entering your password or credit card number.

Another form of phishing is the e-mails we all receive telling us that we inherited three million dollars from a late, Nigerian businessman. In this case, the thieves are trying to get you to send them money for the "processing fees". It may seem obvious not to follow through on e-mails of this nature, but every now and again, I see a story in my local newspaper about someone who did. They always end up paying more and more in fees and losing thousands of dollars before they realize it's not legitimate.

How do you protect yourself against phishing?

Avoid using e-mailed links to on-line companies. If you get an e-mail from a company that says there is a problem with your account, open up your browser and type the web address into the address bar to get to the site directly. From there, you will be able to log in without giving away your password or credit card information. Check your messages and personal information to be sure all is well. If you can't determine that, contact the company directly.

Recognize offers that are too good to be true. Never send money to get money. Have a laugh at the bad grammar and hit the delete button.

If you think you may have been a victim of a phishing scam, take steps to prevent damage. Contact your credit card company and change passwords for on-line accounts. File a police report or contact your state's attorney general's office.